Brits Spent £20 Billion on Overseas Property in 2006
December 22nd, 2006
The Association of International Property Professionals (AIPP) estimates that nearly £20 billion will have been spent in the international property market by UK buyers in 2006 – but they have wasted up to £700 million in unnecessary costs.
Commenting on the launch of the report at OPPLive 06, AIPP’s Chief Executive, Paul Owen, said: “The size of this market now is incredible. With so many new markets and new buyers, it can feel at times that the possibilities are endless. In many ways they are, but so are the potential problems. As a non-profit membership organisation, we are working to make the industry much more professional; the size of the market these days and the needs of the client demand that we do so.”
The report found that nearly a third (31.6%) of overseas properties bought by British buyers are in Spain, with France in second place (18.9%). “This report confirms that, despite the massive increase in emerging markets, nearly half of overseas property purchases by UK buyers are in a country they know, one in which they’ve spent many holidays and, possibly, learnt the language a little at school,” continued Owen. “This will surprise many people, including some in the industry. The story of this year’s market is not just the old favourites though.” Bulgaria is now the third most popular country for UK property buyers, according to the report, with 7.7% of the market (the US came a close fourth at 7.5%).
The full AIPP report: ‘The year in international property, 2006’ will be completed in early 2007 and is likely to show that approximately 200,000 purchases will be made by British buyers in the calendar year of 2006. The report also shows that Brits have squandered much of the spend in 2006 on unnecessary bank charges for international transfers.
With much of the report’s data provided by currency specialists, it is estimated that 25% of the international money transfers for property purchases are undertaken by foreign exchange specialists with 75% done by the banks. Based on the percentage split, that means 150,000 money transfer transactions for property purchases have been placed with the high street banks.
AIPP’s figures show that the average amount spent on an overseas property by UK buyers is £98,000 and 150,000 buyers will each have wasted between £4,000 and £5,000 on their overseas property purchase this year as a result of poor exchange rates. That equals between £600 million and £750 million in wasted money in one year alone.
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